Image: HM Treasury [CC BY-NC-ND 2.0], via Flickr
Martin McQuillan looks at what might and what won’t feature in today’s budget
As professor William Shatner says during his cameo in Airplane II: The Sequel, “I guess irony can be pretty ironic sometimes.” This week is National Student Money Week.
It is also the week of the chancellor’s latest fiscal event, during which he is likely to offer students and young people the sum total of absolutely nothing as part of his giveaway-yet-deeply-responsible spring budget. Meanwhile, the BBC reports that Northern Ireland’s students are to benefit from a £1 million hardship fund.
The theme of this year’s National Student Money Week is “less risk, more reward”. Sadly, this is advice that Jeremy Hunt—a man who made his personal fortune out of a website called Hotcourses—is unlikely to heed when it comes to tax cuts.
It has been well trailed that we can expect some combination of a penny off national insurance and a penny off income tax. Which doesn’t amount to much if you’ve just come off a fixed-rate mortgage or tried to fill up a tank of petrol this month.
Is there anything else in this budget—probably the last before a general election—that universities and researchers should be looking out for? Last week, the Russell Group of research-intensive universities made a splash with its economic impact analysis, authored by London Economics, which also asked the chancellor to use the budget to make good on the promise to raise the science budget to £20 billion before this parliament is out.
As Rachel Magee reports on our news pages, the chancellor has announced a £360m package for R&D and manufacturing.
We are pretty certain that the budget green book, which will be published shortly after Hunt begins his statement in the House of Commons today, will show that when you sweep together all the spending across multiple departments, the science budget will total the required £20bn.
“We are delivering on last year’s budget commitments in full, with R&D spending at its highest-ever level of £20bn for the next financial year,” a government spokesperson told Research Professional News last week. “We have further ambitious plans for the coming year as we continue to support innovation and in turn grow jobs and our economy,” ran the government statement, pointing to the “progress” that has allegedly been made on the UK Science and Technology Framework.
The chancellor held a pre-budget tech and life sciences business breakfast on 27 February, saying he would continue to back artificial intelligence and life sciences. The mood music remains upbeat, even if the actions point in other directions, such as cuts to the rate of R&D tax relief for small and medium-sized enterprises in the November budget.
“The UK is home to some of the world’s brightest academics and we’re focused on becoming global leaders in life sciences—an engine for economic growth and high-skilled jobs across the country,” Hunt said, passing around the scrambled eggs at 11 Downing Street. He cited some £1.5bn of investment in AI at the moment, but there were no new promises of extra cash amid the croissants and coffee.
That, of course, is not all direct spending on research councils and universities, whose research budgets have been significantly eroded by rampant inflation. But, in a sense, the £20bn target will have been reached.
The latest tranche of £360m comes after a slab of £4.5bn that was announced in the traditionally more significant autumn statement in November. Given that in the recent past ministers have not been shy about announcing large sums of money for the science superpower, the relatively small sum of £360m would suggest that we have reached the end of the road when it comes to R&D investment in this parliament.
As part of that £360m, there is £200m of joint government and industry funding for aerospace projects. The Treasury says the money will go to energy-efficient and zero-carbon aircraft technology, which is a bit greener and ‘woker’ than the government has positioned itself of late.
It also includes £92m of joint government and industry funding to expand two pharmaceutical companies’ manufacturing plants. Of that, only £7.5m is coming from the Treasury, while the rest will come from the companies receiving the support: Northern Ireland-based Almac and Wales-based Ortho Clinical.
If that is all the Treasury has to trail on R&D investment before the budget then that scratching sound you hear is the bottom of the science department’s barrel of good news stories being scraped. The news narrative will be all about tax cuts, so few will be paying attention to what bits and bobs of science money are being committed.
Prime minister Rishi Sunak has been promising pre-election tax cuts for as long as he has been allowed near a microphone unaccompanied, and it’s now an article of faith that this is what the spring statement will deliver. Even if Hunt has spent the week playing down expectations and speaking of “a pathway to tax cuts”, which sounds a lot less certain.
Murder on the dancefloor
A 2p tax cut is unlikely to make much difference for a population struggling with a cost of living crisis and interest rates that, like the average vice-chancellor’s blood pressure, refuse to come down. With an Ipsos Mori poll putting Conservative electoral support at just 20 per cent, a 2p tax cut is unlikely to do much for the party’s chances of staying in government.
Meanwhile, students, universities and researchers all have genuine needs. None of which are likely to be addressed in this budget.
Student maintenance in England is in a dire state. It has failed to keep up with the real rate of inflation, leaving students struggling to keep up with the cost of eating and heating, never mind buying books or paying for social activities.
The latest episode of university derangement syndrome came this weekend in the Daily Mail, which reported on a sociology lecture at the University of Manchester—given in November—in which the lecturer had discussed “the stress caused by buying a round at the pub—deemed to be an uncomfortable financial issue for cash-strapped students”. The Mail is losing its mind that a trigger warning was allegedly given by the unnamed academic to forewarn about the potentially upsetting content of the lecture.
The Mail is more concerned by the academic’s attempt to signal triggering content than by the fact that students at a Russell Group university may not be able to afford the most basic of student expenditure. The social embarrassment caused by a poor student’s inability to get a round in is, in fact, an important plot point in the recent Bafta-nominated film Saltburn.
It is probably a more important twist in the narrative than that scene with a nude Barry Keoghan dancing that everyone—including the Daily Mail—seems obsessed by. Anyway, student poverty, as it used to be called in the 1980s, has more immediate and real-world manifestations than in Amazon-backed film productions.
But there is little prospect that the chancellor is going to do anything about it in the spring statement. The failure to fund student maintenance properly simply means that parents have to put their hands deeper into already empty pockets in just another drag on an economy in which household budgets are already stretched to breaking point.
Speaking of breaking points, undergraduate tuition fees in England have had one uplift with inflation in the past 12 years. The state of funding for higher education is not even close to being halfway up the list of worthy causes screaming for the attention of those who hold the public purse strings.
There is almost zero prospect this week of Hunt even acknowledging the plight of university finances, never mind doing something to correct the slide. Rather, rewriting the terms and conditions of the student loan book for millions of borrowers has been one of the primary mechanisms that Hunt and Sunak have used to create the ‘fiscal headroom’ (whether the national debt is forecast to be falling between March 2028 and March 2029) for pre-election tax cuts.
There is a reason why only 1 in 10 people under the age of 40 are planning to vote Conservative at the next election. Former universities minister Sam Gyimah—the self-styled minister for students—used to say that the Tories needed to get out to make the case for Conservatism on campuses. That task seems to have been abandoned completely.
What do researchers want from this budget? Some sort of indication that they will not be facing budget cuts in the next parliament to pay for giveaway tax cuts today would be a good start. All eyes will be on the Office for Budget Responsibility’s forecast and the post-budget analysis by the Institute for Fiscal Studies as to the likely cut in public spending required to cover the cost of the chancellor’s 1p off income tax and 1p off national insurance.
The IFS has said of the last fiscal event: “While day-to-day spending on public services would rise in real terms by £17bn overall, after accounting for plausible settlements for spending on the NHS, childcare, defence, schools and overseas aid, other areas of government would face real-terms cuts of £18bn by 2028-29.” That is equivalent to an average cut of 3.4 per cent a year for four years, according to the IFS.
So, while we may see a few more science rabbits pulled out of the chancellor’s hat to hit that £20bn target, the budget is likely to leave the existential questions facing universities unaddressed. This close to an election, those questions fall into the too-difficult-to-address column; the hope is that they do not become election issues by the time polling rolls along.
This is an extract from our daily 8am Playbook briefing published on 5 March, available to subscribers as a premium service. For more information, email sales@researchresearch.com.